A few key notes:
1- most overbought in 10 years.
2- COT contracts out at all time high with commercials in most bearish position in 20 years
3 - Long term support trend line was broken and is being retested at the moment
4- 100 month MA at 1.255
5- 0.618 retracement level = 1.2598
6- The US 10 yield at 4 year high but for the past 2 months there has been a massive divergence between this move and the dollars move
7- Further the US economy should get a boost by end Q1 and then followed up the rest of 2018 as a result of the tax reform leading to a more hawkish FED in 2018
In the short-term it could potentially head for 1.265 before it turns.
Taking all of the above as well as the potential wave counts into consideration it does seem likely that the pair will start heading down in the next few weeks.
The first wave down should be an impulsive and aggressive move down
1- most overbought in 10 years.
2- COT contracts out at all time high with commercials in most bearish position in 20 years
3 - Long term support trend line was broken and is being retested at the moment
4- 100 month MA at 1.255
5- 0.618 retracement level = 1.2598
6- The US 10 yield at 4 year high but for the past 2 months there has been a massive divergence between this move and the dollars move
7- Further the US economy should get a boost by end Q1 and then followed up the rest of 2018 as a result of the tax reform leading to a more hawkish FED in 2018
In the short-term it could potentially head for 1.265 before it turns.
Taking all of the above as well as the potential wave counts into consideration it does seem likely that the pair will start heading down in the next few weeks.
The first wave down should be an impulsive and aggressive move down